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Tata Ultra MegaSummary of Proposed InvestmentThis Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’sactivities, and this document should not be construed as presuming theoutcome of the Board decision. Board dates are estimates only.Projectnumber 25797CompanynameCoastal GujaratPower LimitedCountryIndiaSectorUtilitiesEnvironmentalcategoryADepartmentInfrastructureStatusPendingDisbursementDate SPIdisclosed November 27, 2007Projected boarddateMarch 27, 2008PreviousEventsSigned: April 24,2008Approved: April 8,2008
 
View Environmental & Social Review Summary (ESRS),click here
 
OverviewSponsor/Cost/Location Development ImpactContactsAttachmentsProject description
Coastal Gujarat Power Limited (CGPL or the company) will build,own and operate a 4,000MW (5 units of 800 MW each) ‘ultramega’ imported coal and supercritical technology based powerplant at the port city of 
Mundra in the state of Gujarat inIndia. The project will be the first 800 MW unit sizesupercritical technology thermal power plant in India andwill likely be the most energy efficient coal based thermalpower plant in the country. The project, awarded by India’sMinistry of Power through tariff based competitive bidding,is being sponsored by Tata Power Company Limited (TataPower or the sponsor). It will sell its generation to theutilities of five different states (the procurers) in the powerstarved regions of western and northern India through along term 25 year take-or-pay Power Purchase Agreement(PPA). The project will cost about $4.14 billion and will sellpower at 25 year levelised tariff of INR2.26 per kWh whichis competitive compared to current prices of bulk power inIndia. The project will source imported coal from mines of Indonesia and other countries and will use the Mundra portfacilities (operated by the Adani group of Gujarat) for theproject. The main plant equipment is being supplied byDoosan (supercritical boilers) and Toshiba (steam turbinegenerators). The project is the first private sector powerproject in India to be based on the energy efficientsupercritical technology. The use of this technology in thisplant will help reduce the average Green House Gases(GHG) emissions of Indian power plants per unit of electricity generated in the country. Based on the newtechnology and other measures being taken by thecompany, the project will meet the IFC social andenvironmental Performance Standards. This is also IFC’sfirst financing of a supercritical plant anywhere in theworld.The project fits well with the Government of India’s (GoI’s)plans of attracting significant investments in the country’spower sector which is facing a huge demand supply gap.India is currently facing enormous demand supply gap of about 11% energy shortage and 14% peak powershortage. This gap is very severe in some states such as
 
Maharashtra which suffer from acute deficit of about 19%energy shortage and 27% peak power shortage. Thegrowing gap in the country could lead to significant impactson industrial growth and corresponding economicdevelopment. It is expected that if India is to sustain itscurrent level of GDP growth of 8 – 9% per annum, it wouldneed to add about 160,000 MW in generation capacity inthe next 10 years. The demand supply gap will alsoincrease as more rural households (currently ruralhousehold electrification level of only about 44% in thecountry) are electrified under the accelerated ruralelectrification program being currently undertaken by theGoI. Therefore, there is an urgent need to achievesignificant generation capacity addition in a short timeframe which will help meet the rising electricity demandand lead to economic development of the country. It isexpected that large projects of this kind will help reducethe demand supply gap and the economic impact of delayswhich are encountered by most infrastructure projects inthe country. The project will sell power to the states of Gujarat, Rajasthan and Maharashtra in western India andHaryana and Punjab in northern India. All these statescurrently suffer from energy shortages ranging from 7% to19% and peak power shortages of about 10% to 30%. Theproject will play an important role in reducing these gapswith cheap and reliable supply which will also help inimproving access to electricity in the country.- Abatement of GHG emissions:The project uses supercritical coal technology, which hasbeen approved by CDM-Executive Board as a “CleanDevelopment Mechanism” for power projects in India. Dueto the use of this technology and choice of unit sizes, thethermal efficiency of the project (LHV, gross) will be higherby about 70%, 30% and 20% as compared to the averagethermal efficiency (LHV, gross) of coal based power plantsin India, across the globe and OECD. Therefore, the projectwill result in reducing the average carbon emissions of India’s electricity generation system per unit of electricitysupply.IFC’s approach towards abatement of climate change
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